Federal Workers Looking at Higher Health Care Tab in 2011

The U.S. Office of Personnel Management (OPM) has announced that premiums for the 2011 Federal Employee Health Benefits (FEHB) Program will rise by an average 7.2% for the enrollee share of premiums, which the announcement notes is less than last year’s premium increase of 8.8%, and lower than rate hikes predicted for large, employer-sponsored health programs by benefit consultants such as Aon, Milliman, and PricewaterhouseCoopers, which are estimating 2011 premium increases between 8.9% and 10.5%.

The Federal Employee Health Benefits Program is the nation’s largest group plan.  It covers about 8 million people.

PPACA Impacts

The announcement references the Affordable Care Act, notes that it “extends important new benefits to FEHB enrollees and strengthens the program”, and that preventive care and screenings will be available with no out-of-pocket costs, and that enrollees will have the right to add their young adult children under the age of 26 to their family health plan. According to an OPM analysis, it says that these “new consumer protections account for a 1.7% increase in premiums”.

Additionally, all FEHB plans are fully compliant with the insurance reforms required by the Affordable Care Act and, in the case of preventive care, FEHB plans have extended benefits ahead of when they were required to do so by the Act, according to the announcement.

Enrollees with self-only coverage will pay, on average, $5.53 more each pay period and enrollees with family coverage will pay $11.45 more per pay period. FEHB enrollees pay, on average, 30% of the total cost of the plan’s premium while the government pays 70%, according to OPM.

Enrollees in the Blue Cross Blue Shield Standard Option, the most popular FEHB plan choice, will see their share of the premium increase by 6.9% for self-only coverage and 7.6% for self and family coverage, according to the announcement.

OPM said it will soon launch a new Health Claims Data Warehouse which it says will become a “useful tool for analyzing health services data from the FEHB plans” (in 2011, there will be 207 health plan options in the FEHB Program). According to the announcement, this warehouse will allow OPM to better understand the health of federal employees, as well as the cost and quality of care they receive. The warehouse will give OPM the ability to manage the program so that employees and tax-payers get the best value, according to the announcement.

Other Benefits

Additionally, all FEHB plans will offer tobacco cessation benefits in compliance with the U.S. Public Health Services’ 2008 clinical guidance on tobacco cessation. This includes full coverage (no enrollee co-payments) for seven FDA-approved medications, four counseling sessions per quit attempt, and two quit attempts per year.

Five FEHB plans have increased benefits for hearing devices and/or other assistive devices and twelve FEHB plans currently provide coverage for hearing aids and/or assistive technology devices.  Sixteen FEHB plans will offer testing for up to four transplant donors for bone marrow and stem cell transplants.

Two health plans, GEHA and Mail Handlers, will pilot coordination of benefits with Medicare, whereby the FEHB plan will contribute toward the cost of the enrollee’s Medicare Part B premium in return for the enrollee accepting the same cost sharing (e.g. copayment/coinsurance) as non-Medicare enrollees. Medicare enrollees may voluntarily participate in these pilot programs. Currently, these plans waive some cost sharing for enrollees with Medicare coverage.

More information is available in OPM’s Guide to Federal Benefits at http://www.opm.gov/insure.